Interim report BNG Bank 2020 BNG Bank/Halfjaarbericht 2¢  BNG Bank is a committed partner...

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Transcript of Interim report BNG Bank 2020 BNG Bank/Halfjaarbericht 2¢  BNG Bank is a committed partner...

  • Interim report BNG Bank 2020

  • CONTENTS 2

    Contents

    1 Profile 3

    2 Developments first half of 2020 7

    3 Notes to the financial results for the first half of 2020 14

    4 Consolidated interim financial statements 21

    5 Review report 65

  • PROFILE 3

    Profile

  • PROFILE MISSION AND STRATEGY 4

    Mission and strategy

    Mission BNG Bank is a committed partner for a more sustainable world. We enable the public sector to achieve socially relevant objectives.

    Strategy – BNG Bank provides financing for all maturities while keeping prices to a minimum. – By providing financial solutions, payment services and expertise, BNG Bank enables

    clients to achieve their social objectives. – BNG Bank builds lasting relationships with stakeholders and responds proactively to their

    requirements. – BNG Bank’s services are always available, irrespective of the situation on the financial

    markets.

    Core values BNG Bank’s core values are sustainable, reliable and professional: – sustainable is interpreted by BNG Bank as simultaneously serving economic,

    environmental and social interests. This notion is inextricably linked to BNG Bank’s mission;

    – In the light of its public role, reliable means that BNG Bank is a safe bank due to the shareholding of Dutch public authorities and largely solvency-free lending, which is visible to and distinctive for stakeholders; and

    – professional means that BNG Bank continuously develops its services, staff and information provision.

    Strategic objectives BNG Bank is a relevant player in the funding of Dutch local authorities as well as in the housing, healthcare, education, energy, environment, mobility and networks sectors. BNG Bank aims to meet more than half of the long-term credit demand from these sectors. The market share indicates the extent to which BNG Bank achieves this. BNG Bank aims to achieve a reasonable return, rather than maximise profit. Through dividends, this return accrues to the public authority shareholders. BNG Bank is a committed partner for a

    more sustainable world. We enable the

    public sector to achieve socially relevant

    objectives.

  • PROFILE MISSION AND STRATEGY 5

    Conditions The combination of the lowest possible lending rates and a reasonable return for shareholders is feasible because two conditions are met: an excellent risk profile and an efficient organisation.

    Sustainable Development Goals The 17 Sustainable Development Goals (SDGs) will be important agenda items for the government and the business community until 2030. These SDGs are aimed at ensuring peace and prosperity for people and the world, now and in the future, and were endorsed in 2015 by all Member States of the United Nations. BNG Bank contributes to the SDGs as well, and they guide the bank’s actions in both the short and the long term. BNG Bank focuses on the SDGs that are closest to the services it provides.

  • PROFILE BUSINESS MODEL 6

    Business model

    BNG Bank acts as an intermediary between the international money and capital markets and the Dutch public sector. BNG Bank has been providing financing to the public sector since 1914, at competitive terms and conditions and for all maturities, irrespective of the situation on the financial markets. The majority of the loans provided (more than 90%) are loans to government bodies that are guaranteed by government bodies. These loans are not subject to solvency requirements and have a risk weighting of 0%. BNG Bank also takes care of payment transactions for clients.

    BNG Bank is seen as a safe bank thanks to the shareholding of Dutch public authorities and largely solvency-free lending. BNG Bank has the highest external credit ratings (Moody’s: Aaa, FitchRatings: AAA, S&P Global: AAA). BNG Bank consequently has a strong funding position on the international money and capital markets. Short- and long-term funding in various currencies can be raised at low prices. BNG Bank is one of the largest bond issuers in the Netherlands and can offer low rates to clients.

  • DEVELOPMENTS FIRST HALF OF 2020 7

    Developments first half of 2020

  • DEVELOPMENTS FIRST HALF OF 2020 KEY EVENTS 8

    Key events

    January 2020 Sustainability of sports facilities

    Sports associations are able to apply for a loan from the BNG Sustainability Fund to make their

    accommodation more sustainable. Thanks to a guarantee underwritten by Stichting

    Waarborgfonds voor de Sport, it is possible to provide these loans at an attractive rate of

    interest. This expansion of the BNG Sustainability Fund is part of the ‘Sports Sustainability

    Roadmap’, which is supported by, for example, the Ministry of Health, Welfare and Sport,

    NOC*NSF and the Association of Sports and Municipalities.

    March 2020 COVID-19 pandemic

    The COVID-19 pandemic has far-reaching social consequences, also for clients of BNG Bank.

    BNG Bank is therefore committed to helping clients through this difficult period and ensuring

    continuity of service. The bank has sufficient access to the capital market to raise funding and

    has sufficient liquidity to provide clients with finance. BNG Bank also participates in the Task

    Force Corona of the Netherlands Bankers’ Association, with the aim of supporting clients as

    much as possible during this crisis period.

    Promoting sustainable capital markets

    BNG Bank and Government Pension Investment Fund (GPIF) from Japan, the world’s largest

    pension fund, will work together to promote sustainable capital markets. BNG Bank’s

    sustainability bonds are issued in line with the international Sustainability Bond Guidelines,

    which are administered by the International Capital Market Association (ICMA). These bonds

    offer GPIF asset managers the opportunity to contribute to a sustainable society.

    April 2020 Dividend payment for 2019 postponed

    When its annual figures for 2019 were published, BNG Bank proposed to distribute a dividend

    to shareholders. However, the ECB has expressly recommended either to suspend the

    payment of the dividend until at least 1 October 2020 or to cancel the 2019 dividend payment

    altogether. The background to this is the significant impact that the COVID-19 pandemic is

    having on the economy and the role that is foreseen for banks to mitigate the effects as much

    as possible.The Supervisory Board and Executive Board has decided to postpone payment of

    the dividend for 2019 by BNG Bank until at least 1 October 2020. In July 2020 the ECB

    recommended to postpone the 2019 dividend payment until after 31 December 2020. The

    Supervisory Board and the Executive Board decided to follow the recommendation and to

    postpone the dividend payment until after December 31, 2020.

  • DEVELOPMENTS FIRST HALF OF 2020 KEY EVENTS 9

    Jan van Rutte and Johan Conijn reappointed as Supervisory Board members

    The General Meeting of Shareholders reappointed Jan van Rutte and Johan Conijn as

    members of the Supervisory Board for a second term of four years on the recommendation of

    the Supervisory Board.

    Working together on the continued development of the Netherlands

    More than 30 parties, including BNG Bank, have indicated in a joint statement that they will

    make efforts and take responsibility to prevent possible negative consequences of the

    COVID-19 pandemic and to safeguard the continuity of construction output and employment

    as much as possible. The parties are working together to meet the high demand for housing

    and to accelerate the task of making the existing premises from the Climate Agreement more

    sustainable.

    June 2020 BNG Bank supports Dutch companies’ sustainability statement

    Nearly 250 companies, including BNG Bank, have signed the statement entitled ‘Dutch

    businesses endorse sustainability in COVID-19 recovery’, in which they advocate taking

    sustainability as the cornerstone for COVID-19 recovery plans. This statement was drawn up

    on the initiative of the Dutch Sustainable Growth Coalition (DSGC), which brings together eight

    Dutch multinationals. The DSGC strives for sustainable growth by combining economic gains

    with social developments and contributing to the SDGs.

  • DEVELOPMENTS FIRST HALF OF 2020 IMPACT OF COVID-19 PANDEMIC 10

    Impact of COVID-19 pandemic

    The COVID-19 pandemic has far-reaching financial and social consequences, both for clients of BNG Bank and for the bank itself. The global recession is causing a chain reaction of developments, leading to a drop in demand and reduced production, with a sharp contraction of the global economy in 2020 as a consequence. A gradual economic recovery is expected in 2021, but activity in several sectors will remain at a lower level for a long time to come. A full economic recovery can only be expected after a vaccine has become sufficiently available.

    Impact on clients The COVID-19 pandemic has a major financial and social impact on the bank’s clients. Of BNG Bank’s client sectors, healthcare institutions and municipalities in particular play an important role in combating the virus and implementing the measures taken by the government. They are suffering severe financial consequences from this. BNG Bank has access to sufficient liquidity to provide loans and does what is possible to help